What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-04-30 · 137 added, 71 removed, 118 unchanged (64% of the section changed)

15 unchanged sentences

Gibraltar Industries, Inc.

(the "Company") is a leading manufacturer and provider of products and services for the residential, agtech, renewable energy and infrastructure markets.

The Company operates and reports its results in the following four reporting segments:

(the "Company") is a leading manufacturer and provider of products and services for the residential, agtech, and infrastructure markets.

The Company operates and reports its results in the following three reporting segments:

• Residential

• Infrastructure

The Company serves customers primarily in North America including home improvement retailers, wholesalers, distributors, contractors, institutional and commercial growers of fruits, vegetables, flowers and other plants, convenience store, travel centers, food retailers, and quick-serve restaurants, and renewable energy (solar) developers.

At March 31, 2025, the Company operated forty facilities, comprised of thirty-two manufacturing facilities, two distribution centers, and six offices, which are located in nineteen states, Canada, and China.

The Company's continuing operations serve customers primarily in North America including home improvement retailers, wholesalers, distributors, contractors, institutional and commercial growers of fruits, vegetables, flowers and other plants, convenience store, travel centers, food retailers, and quick-serve restaurants.

At June 30, 2025, the Company's continuing operations operated in thirty-six facilities, comprised of thirty-one manufacturing facilities and five offices, which are located in nineteen states, Canada, and China.

The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of the Company's markets.

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Impacts of Macroeconomic Conditions on our Business

The Company is closely monitoring the fluid nature of the current macroeconomic conditions as it could be adversely impacted by the potential expansion of tariffs for imports of raw materials, primarily steel and aluminum, used in its manufacturing processes, and to a lesser extent, logistics and imported products used by the Company's customers, such as solar modules, as well as responsive or related policies enacted in other countries.

The Company is closely monitoring the fluid nature of the current macroeconomic conditions as it could be adversely impacted by the potential expansion of tariffs for imports of raw materials, primarily steel and aluminum, used in its manufacturing processes, as well as responsive or related policies enacted in other countries.

The global and regional economic conditions may cause volatility in demand for our products as well as cost of materials and logistics, and transportation delays.

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The Company's mission is to make life better for people and the planet, fueled by advancing the disciplines of engineering, science, and technology.

The Company is innovating to reshape critical markets in comfortable living, productive growing, and sustainable power throughout North America.

The Company is innovating to reshape critical markets in comfortable living and productive growing throughout North America.

Furthermore, the Company strives to create compounding and sustainable value for its stockholders and stakeholders with strong and relevant leadership positions in higher growth, profitable end markets focused on addressing some of the world's most challenging opportunities.

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The Company's focus is on creating an environment for our people to have the best opportunity for success, continue to develop, grow and learn.

At core of this pillar is the Company’s development process focused on helping employees reach their potential, improve performance, develop career roadmaps, identify ongoing education requirements, and succession plans.

At the core of this pillar is the Company’s development process focused on helping employees reach their potential, improve performance, develop career roadmaps, identify ongoing education requirements, and succession plans.

The Company believes doing so helps it attract and retain the best people to execute its business plans.

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Recent Developments

On July 31, 2025, the Company purchased substantially all of the assets of a privately held business that primarily specializes in the manufacturing of metal roofing systems for $16.0 million in an all cash transaction, subject to customary working capital and other adjustments.

This business will be reported as part of the Company's Residential segment.

In June 2025, the Company committed to a plan to sell its Renewables business, which represents a strategic shift in operations.

The decision was driven by a change in the Company's long-term strategy to focus its asset portfolio and resources on its Residential, Agtech and Infrastructure segments.

The Renewables business was classified as held for sale as of June 30, 2025, and met the criteria for discontinued operations.

In April 2025, the Company's Board of Directors authorized a new share repurchase program of up to $200 million of the Company's issued and outstanding common stock.

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The repurchase program may be suspended or discontinued at any time at the Company's discretion.

The Company has not made repurchases under the new repurchase program as of April 30, 2025.

On March 31, 2025, the Company acquired two privately held businesses that primarily specialize in the manufacturing of metal roofing systems.

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Results of Operations

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following table sets forth selected results of operations data and its percentage of net sales for the three months ended March 31 (in thousands):

Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

The following table sets forth selected results of operations data and percentage of net sales for the three months ended June 30 (in thousands):

Net sales $ 309,517 100.0 % $ 273,624 100.0 %

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Income from operations 39,506 12.8 % 40,822 14.9 %

Interest income (1,637) (0.5) % (750) (0.3) %

Other expense (income) 94 0.0 % (1,021) (0.4) %

Interest expense (income) 354 0.1 % (1,495) (0.6) %

Other (income) expense (105) 0.0 % 186 0.1 %

Income before taxes 39,257 12.7 % 42,131 15.4 %

Provision for income taxes 9,819 3.2 % 11,147 4.1 %

Income from continuing operations 29,438 9.5 % 30,984 11.3 %

(Loss) income from discontinued operations (3,434) (1.1) % 1,214 0.5 %

Net income $ 26,004 8.4 % $ 32,198 11.8 %

The following table sets forth the Company’s net sales by reportable segment for the three months ended March 31, (in thousands):

The following table sets forth the Company’s net sales by reportable segment for the three months ended June 30, (in thousands):

2025 2024 Total

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Agtech 54,092 34,508 19,584 29,364 — (9,780)

Renewables 43,658 51,496 (7,838) — — (7,838)

Infrastructure 25,167 24,800 367 — — 367

Consolidated $ 309,517 $ 273,624 $ 35,893 $ 49,988 $ (2,808) $ (11,287)

Consolidated net sales decreased by $2.5 million, or 0.9%, to $290.0 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

A 5% decrease in organic revenue, primarily the result of market softness in the Renewables segment, and portfolio management activities in the prior year related to the sale of the Company's residential electronic locker business, were nearly offset by $15.3 million of net sales generated from the current quarter acquisition of Lane Supply in the Residential segment.

Consolidated backlog increased 30% to $434 million, as compared to prior year.

Net sales in the Company's Residential segment decreased $5.1 million, or 2.8%, to $180.0 million for the three months ended March 31, 2025 compared to $185.1 million for the three months ended March 31, 2024.

The decrease was due in part to portfolio management activities in the prior year related to the sale of the Company's residential electronic locker business.

Market softness in retail end market point-of-sale revenue along with mail and

package product sales was nearly offset by participation gains and new product penetration in our building accessories product sales.

Net sales in the Company's Agtech segment increased 32.4%, or $11.0 million, to $45.0 million for the three months ended March 31, 2025 compared to $34.0 million for the three months ended March 31, 2024.

The revenue increase was largely due to $15.3 million generated from the current quarter acquisition of Lane Supply, which more than offset a 12.6% decrease in organic sales related to project start delays for two produce projects waiting on permit approval.

The Company expects to have permits finalized and start construction around the end of the second quarter.

Backlog increased 226% year over year in this segment, driven by both organic orders and with the acquisition of Lane Supply.

Net sales in the Company's Renewables segment decreased $7.8 million, or 15.1%, to $43.7 million for the three months ended March 31, 2025 compared to $51.5 million for the three months ended March 31, 2024.

The decrease was in line with expectations given the slower bookings realized in the second half of 2024 due to headwinds associated with the December 2024 panel installation deadline related to the expiration of the 2022 Presidential Proclamation tariff moratorium.

Order backlog decreased 23% from the prior year as a result of the aforementioned challenges.

Net sales in the Company's Infrastructure segment decreased 2.7%, or $0.5 million, to $21.3 million for the three months ended March 31, 2025 compared to $21.9 million for the three months ended March 31, 2024.

The decrease in revenue was a result of project delays pushing shipments into the second quarter.

Consolidated net sales increased by $35.9 million, or 13.1%, to $309.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase in revenue was driven by $50.0 million of net sales generated from the first quarter 2025 acquisitions of Lane Supply in the Agtech segment and the two metal roofing manufacturers in the Residential segment.

This increase was partially offset by a 4% decrease in organic revenue, primarily the result of delayed project starts in the Agtech segment, along with revenues from the prior year related to the Company's portfolio management action in which the residential electronic locker business was sold at the end of 2024.

Consolidated backlog increased 43% to $278 million, as compared to the end of the prior year quarter.

Net sales in the Company's Residential segment increased $15.9 million, or 7.5%, to $230.3 million for the three months ended June 30, 2025 compared to $214.3 million for the three months ended June 30, 2024.

The revenue increase was largely due to $20.6 million generated from the first quarter 2025 acquisition of the two metal roofing manufacturers, which more than offset portfolio management activities in the prior year related to the sale of the Company's residential electronic locker business.

Continued slowness in mail and package product sales, which are driven mainly by new construction starts from the previous year, was offset by participation gains from local market expansion and recently launched building accessories products.

Net sales in the Company's Agtech segment increased 56.8%, or $19.6 million, to $54.1 million for the three months ended June 30, 2025 compared to $34.5 million for the three months ended June 30, 2024.

The revenue increase was largely due to $29.4 million generated from the first quarter 2025 acquisition of Lane Supply, which more than offset a 28.3% decrease in organic sales related to shifts in large new project starts into the second half of the year.

Backlog increased 71% year over year in this segment, driven by both the acquisition of Lane Supply and organic orders.

Net sales in the Company's Infrastructure segment increased 1.6%, or $0.4 million, to $25.2 million for the three months ended June 30, 2025 compared to $24.8 million for the three months ended June 30, 2024.

The increase in revenue was a result of continued strong execution and demand.

Backlog increased 3% from the prior year.

Demand and quoting remain strong, supported by continued investment at the federal and state levels.

The Company's consolidated gross margin decreased to 26.8% for the three months ended March 31, 2025 compared to 28.9% for the three months ended March 31, 2024.

The decrease was driven by product line mix and volume leverage in the Renewables segment, partially offset by overall continued operational efficiencies along with 80/20 initiatives.

Selling, general, and administrative ("SG&A") expense decreased by $0.5 million, or 0.9% to $52.2 million for the three months ended March 31, 2025 compared to $52.7 million for the three months ended March 31, 2024.

The $0.5 million decrease was primarily due to lower performance-based compensation expense as compared to the prior year quarter.

SG&A expense as a percentage of net sales was relatively flat at 18.0% for the three months ended March 31, 2025 compared to 18.1% for the three months ended March 31, 2024.

The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the three months ended March 31, (in thousands):

The Company's consolidated gross margin decreased to 28.4% for the three months ended June 30, 2025 compared to 30.5% for the three months ended June 30, 2024.

The decrease was driven by product line mix, partially offset by overall continued operational efficiencies along with 80/20 initiatives.

Selling, general, and administrative ("SG&A") expense increased by $5.8 million, or 13.7% to $48.3 million for the three months ended June 30, 2025 compared to $42.5 million for the three months ended June 30, 2024.

The $5.8 million increase was primarily due to incremental SG&A expense incurred by recent acquisitions, partially offset by lower performance-based compensation expense as compared to the prior year quarter.

SG&A expense as a percentage of net sales was flat at 15.6% for the three months ended June 30, 2025 and 2024, respectively.

The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the three months ended June 30, (in thousands):

2025 2024 Total

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Agtech (494) (0.9) % 2,282 6.6 % (2,776)

Renewables (3,145) (7.2) % 1,644 3.2 % (4,789)

Infrastructure 7,083 28.1 % 6,215 25.1 % 868

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The Agtech segment generated an operating margin of (0.9)% in the current year quarter compared to 6.6% in the prior year quarter.

Operating margin declined year over year due to product mix shift along with costs related to the acquisition of Lane Supply.

The Renewables segment generated an operating margin of (7.2)% in the current year quarter compared to 3.2% in the prior year quarter.

The decrease in operating margin was impacted by lower volume and field inefficiencies related to the launch and ramp of the 1P tracker technology introduced in 2024.

In addition, margin was impacted

by restructuring charges incurred during the current quarter to optimize operations for the 1P tracker technology along with costs related to the discontinued legacy solar tracker solutions.

The Infrastructure segment generated an operating margin of 24.7% during the three months ended March 31, 2025 compared to 22.4% during the three months ended March 31, 2024.

Operating margin declined year over year due to costs related to the acquisition of Lane Supply along with the impact from shift in timing of large projects into the second half of the year.

The Infrastructure segment generated an operating margin of 28.1% during the three months ended June 30, 2025 compared to 25.1% during the three months ended June 30, 2024.

The margin improved year over year driven by strong execution, supply chain management and product line mix.

Unallocated corporate expenses decreased $0.5 million from $11.8 million during the three months ended March 31, 2024 to $11.2 million during the three months ended March 31, 2025.

Unallocated corporate expenses decreased $0.3 million from $11.0 million during the three months ended June 30, 2024 to $10.7 million during the three months ended June 30, 2025.

The decrease was largely the result of lower performance-based compensation expense partially offset by higher acquisition-related expense as compared to the prior year quarter.

The Company recorded interest income of $1.6 million for the three months ended March 31, 2025, compared to $0.8 million for the three months ended March 31, 2024.

Increase in interest income during the current year quarter was the result of earnings on certain interest-bearing cash accounts.

No amounts were outstanding on the Company's revolving credit facility during the three months ended March 31, 2025 and 2024, respectively.

The Company recorded other expense of $0.1 million for the three months ended March 31, 2025, compared to other income of $1.0 million recorded for the three months ended March 31, 2024.

The change year over year is the combined result of $1.0 million for the final working capital settlement recorded in the prior year quarter related to the sale of the Company's Japan-based solar racking business within its Renewables segment along with foreign currency translation fluctuations.

The Company recognized a provision for income taxes of $5.9 million and $8.6 million, with effective tax rates of 21.9% and 25.6% for the three months ended March 31, 2025, and 2024, respectively.

The effective tax rate for the three months ended March 31, 2025 was greater than the U.S.

federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by benefits related to tax credit generation or utilization and favorable discrete items due to an excess tax benefit on stock-based compensation.

The effective tax rate for the three months ended March 31, 2024 was greater than the U.S.

The Company recorded interest expense of $0.4 million for the three months ended June 30, 2025, compared to interest income of $1.5 million for the three months ended June 30, 2024.

Expense during the current year quarter was the result of maintenance fees associated with the revolving credit facility nearly offset by earnings on certain interest-bearing cash accounts during the three months ended June 30, 2025.

Interest income during the prior year quarter was the result of earnings on certain interest-bearing cash accounts.

The Company recorded other income of $0.1 million for the three months ended June 30, 2025, compared to other expense of $0.2 million for the three months ended June 30, 2024.

The Company recognized a provision for income taxes of $9.8 million and $11.1 million, with effective tax rates of 25.0% and 26.5% for the three months ended June 30, 2025, and 2024, respectively.

The effective tax rate for the three months ended June 30, 2025 and 2024, respectively, was greater than the U.S.

federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

The following table sets forth selected results of operations data and percentage of net sales for the six months ended June 30 (in thousands):

Net sales $ 555,874 100.0 % $ 514,634 100.0 %

Cost of sales 398,186 71.6 % 359,219 69.8 %

Gross profit 157,688 28.4 % 155,415 30.2 %

Selling, general, and administrative expense 89,527 16.1 % 84,501 16.4 %

Income from operations 68,161 12.3 % 70,914 13.8 %

Interest income (1,283) (0.2) % (2,245) (0.4) %

Other income (29) 0.0 % (166) 0.0 %

Income before taxes 69,473 12.5 % 73,325 14.2 %

Provision for income taxes 16,920 3.0 % 19,387 3.7 %

Income from continuing operations 52,553 9.5 % 53,938 10.5 %

(Loss) income from discontinued operations (5,430) (1.0) % 3,206 0.6 %

Net income $ 47,123 8.5 % $ 57,144 11.1 %

The following table sets forth the Company’s net sales by reportable segment for the six months ended June 30, (in thousands):

2025 2024 Total

Change Acquisitions Portfolio Management Ongoing Operations

Residential $ 410,252 $ 399,427 $ 10,825 $ 20,624 $ (5,553) $ (4,246)

Agtech 99,132 68,535 30,597 44,648 — (14,051)

Infrastructure 46,490 46,672 (182) — — (182)

Consolidated $ 555,874 $ 514,634 $ 41,240 $ 65,272 $ (5,553) $ (18,479)

Consolidated net sales increased by $41.2 million, or 8.0%, to $555.9 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase in revenue was driven by $65.3 million of net sales generated from the current year acquisitions of Lane Supply in the Agtech segment and the two metal roofing manufacturers in the Residential segment.

This increase was partially offset by a 3.6% decrease in organic revenue, the result of delayed project starts in the Agtech segment and revenues from the prior year related to the Company's portfolio management action in which the residential electronic locker business was sold at the end of 2024.

Consolidated backlog increased 43% to $278 million, as compared to prior year.

Net sales in the Company's Residential segment increased $10.8 million, or 2.7%, to $410.3 million for the six months ended June 30, 2025 compared to $399.4 million for the six months ended June 30, 2024.

The increase was largely due to $20.6 million generated from the current year acquisition of the two metal roofing manufacturers, which more than offset portfolio management activities in the prior year related to the sale of the Company's residential electronic locker business and a decrease in organic revenue.

Net sales in the Company's Agtech segment increased 44.6%, or $30.6 million, to $99.1 million for the six months ended June 30, 2025 compared to $68.5 million for the six months ended June 30, 2024.

The revenue increase was largely due to $44.6 million generated from the current year acquisition of Lane Supply, which more than offset a 20.5% decrease in organic sales related to shifts in large new project starts into the second half of the year.

Backlog increased 71% year over year in this segment, driven by both the acquisition of Lane Supply and organic orders.

Net sales in the Company's Infrastructure segment were essentially flat for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Backlog increased 3% from the prior year.

The Company's consolidated gross margin decreased to 28.4% for the six months ended June 30, 2025 compared to 30.2% for the six months ended June 30, 2024.

The decrease was driven by product line mix, partially offset by overall continued operational efficiencies along with 80/20 initiatives.

Selling, general, and administrative ("SG&A") expense increased by $5.0 million, or 5.9% to $89.5 million for the six months ended June 30, 2025 compared to $84.5 million for the six months ended June 30, 2024.

The $5.0 million increase was primarily due to incremental SG&A expense incurred by recent acquisitions, partially offset by lower performance-based compensation expense as compared to the prior year.

SG&A expense as a percentage of net sales decreased to 16.1% for the six months ended June 30, 2025 compared to 16.4% for the six months ended June 30, 2024.

The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the six months ended June 30, (in thousands):

2025 2024 Total

Income from operations:

Residential $ 74,871 18.3 % $ 77,659 19.4 % $ (2,788)

Agtech 2,891 2.9 % 4,890 7.1 % (1,999)

Infrastructure 12,341 26.5 % 11,111 23.8 % 1,230

Unallocated Corporate Expenses (21,942) (3.9) % (22,746) (4.4) % 804

Consolidated income from operations $ 68,161 12.3 % $ 70,914 13.8 % $ (2,753)

The Residential segment generated an operating margin of 18.3% in the current year compared to 19.4% in the prior year.

Operating margin declined year over year, primarily as a result of product mix and lower volume during the current year.

The Agtech segment generated an operating margin of 2.9% in the current year compared to 7.1% in the prior year.

Operating margin declined year over year due to costs related to the acquisition of Lane Supply along with the impact from the shift in timing of large projects into the second half of the year.

The Infrastructure segment generated an operating margin of 26.5% during the six months ended June 30, 2025 compared to 23.8% during the six months ended June 30, 2024.

The margin improved year over year driven by strong execution, supply chain management and product line mix.

Unallocated corporate expenses decreased $0.8 million from $22.7 million during the six months ended June 30, 2024 to $21.9 million during the six months ended June 30, 2025.

The decrease was largely the result of lower performance-based compensation expense partially offset by higher acquisition-related expense as compared to the prior year.

The Company recorded interest income of $1.3 million for the six months ended June 30, 2025, compared to $2.2 million for the six months ended June 30, 2024.

The decrease in interest income during the current year was the result of earnings on lower average balances on certain interest-bearing cash accounts during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Other income for the six months ended June 30, 2025, was essentially flat as compared to the six months ended June 30, 2024.

The Company recognized a provision for income taxes of $16.9 million and $19.4 million, with effective tax rates of 24.4% and 26.4% for the six months ended June 30, 2025, and 2024, respectively.

The effective tax rate for the six months ended June 30, 2025 and 2024, respectively, was greater than the U.S.

federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

Liquidity and Capital Resources

The following table sets forth the Company's liquidity position as of (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 43,291 $ 269,480

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Generally, the Company's foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements.

As of March 31, 2025 and December 31, 2024, the Company's foreign subsidiaries held $6.7 million and $8.9 million of cash, respectively.

As of June 30, 2025 and December 31, 2024, the Company's foreign subsidiaries held $6.9 million and $8.9 million of cash, respectively.

The Company believes that these sources, together with cash expected to be generated from operations, should provide the Company with ample liquidity and capital resources to meet both its short-term and long-term cash requirements and to continue to invest in operational excellence, growth initiatives, share repurchases and the development of the organization.

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See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The following table sets forth selected cash flow data for the three months ended March 31, (in thousands):

Cash provided by (used in):

Operating activities $ 13,684 $ 53,181

Investing activities (195,664) (4,366)

The following table sets forth selected cash flow data for the six months ended June 30, (in thousands):

Net cash provided by (used in):

Operating activities of continuing operations $ 48,630 $ 90,411

Investing activities of continuing operations (221,554) (7,326)

Financing activities (62,499) (1,447)

Discontinued operations 8,954 (1,789)

Effect of foreign exchange rate changes 280 (173)

1 unchanged sentence

Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2025 of $13.7 million consisted of net income of $21.1 million, non-cash net charges totaling $12.4 million, which include depreciation, amortization, stock-based compensation and other non-cash charges, and $19.8 million of cash invested in working capital and other net operating assets.

The cash invested in working capital and other net operating assets was primarily the result of payments made for prior year-end accruals of performance based incentive plans, deferred compensation, and settlements of customer rebates.

Net cash provided by operating activities for the three months ended March 31, 2024 of $53.2 million consisted of net income of $24.9 million, non-cash net charges totaling $11.0 million, which include depreciation, amortization, stock-based compensation and other non-cash charges, and $17.3 million of cash generated from working capital and other net operating assets.

The cash generated from working capital and other net operating assets was largely due to increases in accounts payable, the result of the timing of purchases and vendor payments, partially offset by investment in inventory to align with anticipated seasonal sales volumes increases.

Net cash provided by operating activities of continuing operations for the six months ended June 30, 2025 of $48.6 million consisted of income from continuing operations of $52.6 million, non-cash net charges totaling $22.7 million, which include depreciation, amortization, stock-based compensation and other non-cash charges, and $26.7 million of cash invested in working capital and other net operating assets.

The cash invested in working capital and other net operating assets was primarily the result of increases in accounts receivable and inventory, partially offset by increases in accounts payable, largely the result of seasonal demand.

Net cash provided by operating activities of continuing operations for the six months ended June 30, 2024 of $90.4 million consisted of income from continuing operations of $53.9 million, non-cash net charges totaling $18.5 million, which include depreciation, amortization, stock-based compensation and other non-cash charges, and $18.0 million of cash generated from working capital and other net operating assets.

The cash generated from working capital and other net operating assets was largely due to increases in accounts payable, the result of the timing of purchases and vendor payments, and billings in excess of costs, the result of increased advance payments from and billings to customers on projects.

These activities were partially offset by increases in accounts receivable and inventory, largely the result of seasonal demand.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2025 of $195.7 million was primarily due to the acquisitions of Lane Supply and the two metal roofing related businesses of $184.6 million.

To a lesser extent, net capital expenditures of $11.4 million, offset by receipt of the $0.3 million final working capital settlement resulting from the sale of the Company's electronic locker business within the Company's Residential segment in the fourth quarter of 2024, also contributed to the net investment of cash.

Net cash used in investing activities for the three months ended March 31, 2024 of $4.4 million consisted of net capital expenditures.

Net cash used in investing activities of continuing operations for the six months ended June 30, 2025 was $221.6 million, primarily due to the acquisitions of Lane Supply and the two metal roofing related businesses of $192.9 million, and net capital expenditures of $29.0 million largely related to the purchases of two facilities.

These investments were partially offset by a receipt of the $0.3 million final working capital settlement received in connection with the sale of the Company's electronic locker business within the Company's Residential segment in the fourth quarter of 2024.

Net cash used in investing activities of continuing operations for the six months ended June 30, 2024 of $7.3 million was due to net capital expenditures.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2025 of $62.4 million consisted of common stock repurchases.

The Company paid $60.0 million during the three months ended March 31, 2025 related to repurchase of 914,679 shares under the Company's authorized share repurchase program.

Net cash used in financing activities for the six months ended June 30, 2025 of $62.5 million consisted of common stock repurchases.

The Company paid $60.0 million during the six months ended June 30, 2025 related to the repurchase of 914,679 shares under the Company's authorized share repurchase program.

The remainder of the repurchased common stock of $2.5 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Net cash used in financing activities for the three months ended March 31, 2024 of $1.4 million consisted of common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Net cash used in financing activities for the six months ended June 30, 2024 of $1.4 million consisted of common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Critical Accounting Estimates

There have been no material changes to the Company's critical accounting estimates during the three months ended March 31, 2025 from those disclosed in the consolidated financial statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

As a result of the three separate businesses acquired in 2025, the Company has reinstated critical accounting estimates related to measuring and recognizing the fair value of assets acquired and liabilities assumed in significant business combination transactions.

Additionally, there have been no other material changes to the Company's critical accounting estimates during the three and six months ended June 30, 2025 from those disclosed in the consolidated financial statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Measuring and Recognizing the Fair Value of Assets Acquired and Liabilities Assumed in a Significant Business Combination

When the Company acquires a business, the Company allocates the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values.

The Company records any premium over the fair value of net assets acquired as goodwill.

Significant judgment is necessary to determine the fair value of the purchase price.

The allocation of the purchase price involves judgments and estimates both in characterizing the assets and in determining their fair value.

The way the Company characterizes the assets has important implications, as long-lived assets with definitive lives, for example, are depreciated or amortized, whereas goodwill is tested annually for impairment, as explained above.

With respect to determining the fair value of assets acquired in a significant business combination, the most subjective estimates involve valuations of long-lived assets, such as identified intangible assets and property, plant, and equipment.

The Company uses all available information to make these fair value determinations and engage independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.

The fair values of long-lived assets are determined using valuation techniques that use discounted cash flow methods, independent market appraisals, and other acceptable valuation techniques.

The significant assumptions used to estimate the value of the intangible assets included discount rates, customer attrition, and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates and operating profit margin).

The significant assumptions related to estimating the fair value of the intangible assets above are forward looking and could be affected by future economic market conditions.

Recent Accounting Pronouncements

1 unchanged sentence

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What changed 10-Q

Item 2. Management’s Discussion and Analysis